First time home-buyer... Does this make sense?

Question

Hello,

I am a first time home buyer in the South Florida (Broward County) area utilizing a VA loan as my first home purchase. I am 25 years old, and have a savings of about $20k. I am pre-approved for a 300,000 loan that I plan to NOT put a down payment on. Earlier today, I found a property in a decent area (I'd rate it a C+ to B-) that is listed at $290k, and states that is a 3/2 with 1600 sqft. The home also has a stand alone, enclosed garage in the back of the property that has a water heater (meaning it has water running to it). I'd estimate that the size of the garage is about 600-700 sqft. I went to go see the home today, and found it to be appealing. Kitchen and living room have been redone, floors redone, fresh paint, etc.. The home features 2 large bedrooms with a large full bathroom (not connected to a bedroom..standalone bathroom). The problem is that the "3rd" bedroom is a small room (cant fit a bed in it) with no closet. The other bathroom in the house is also a full bathroom and large and connected to a part of the house behind the kitchen that they call "the den".

Here are my thoughts. This house interests me because I feel that the standalone garage (literally an actual building with a garage door) can be converted to a 1 bedroom studio (I'd estimate $20k), and the "den" can be drywalled making it an enclosed master bedroom. For the area I am in, I spoke with my realtor and are confident that the studio would rent for $900-$1100, and if I were to rent the actual house (in a year or so) comparable show it'd rent for $1800-$2000.

The home is clearly a flip, and I feel that the asking price is way too high for the area and not listed appropriately since the home is not a 3/2 right now, but an actual 2/2. I plan to make an offer of $265k (I have a few outstanding questions for the seller first that I will need answered).

From experience, does anyone have any thoughts I am not thinking of? Is there a way to check if the city would allow the garage to be converted? I am happy to provide more solid numbers, location, pictures, etc. that would help evaluate the opportunity.

I appreciate your time reading this, and help you can offer.

Patrick

Patrick Bavaro · Answer

@Wayne Brooks Thanks for the help Wayne! I'm going to be dropping by Tuesday. Looks like from tax records the home is a 2/1, not a "3/2" meaning there are also non permitted additions.

Wayne Brooks · Answer

Assuming it is in single family zoning, a stand alone garage conversion to a separate unit likely would not be allowed.  If you go down in person to the building and zoning dept they can tell you.